GM Breweries surges 12% as board plans to review bonus share proposal

Shares of GM Breweries jumped 12 percent in trade on April 1 after the company's board said it will consider a proposal for issuing bonus shares in its April 4 meeting.

At 11.30am, shares of the company surged to Rs 706.25 on the BSE, higher by 11.53 percent from the previous session's closing price.

The company will consider the issuance of bonus shares after six years. Earlier, bonus shares were issued in the ratio of 1:4 in 2018, 2016, and 2014.

A bonus issue is an offer given to existing shareholders of the company to subscribe for additional shares. The number of shares increases, but the value of the investment remains the same.

The board will also consider and take on record the audited financial results for the quarter, and the year ended March 31, 2024. Additionally, the board of directors will also consider declaring a dividend.

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For FY23, GM Breweries announced a final dividend of Rs 6 per share with face value of Rs 10. Prior to that, in FY22, the final dividend announced was Rs 5 per share.

GM Breweries registered sales of Rs 157 crore in the December quarter, an increase of just 2 percent year-on-year (YoY). Volumes were largely flat on account of subdued consumer sentiment during the festive season and unseasonal rain.

Over the past six months, shares of GM Breweries fell over 1 percent, underperforming the frontline indices. In comparison, the Nifty 50 jumped 15 percent during the same time period.

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